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WINTER1980

Published Quarterly by thePacific County Historical Society

State of Washington

Raymond's Oyster Money - Issued May 1932

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SOiJTH SEND MEQCHANts Assoc r1oN�

SO�TH BEND, WASH .

In �NITED STATES C�QQENCY,or fbcific CountyWash, current expense warrants, or anyother rnunttipal warran+4,at the option of+be South Bend Merchonta Auoclatton

South Bend's Wooden Money (First Series) - Issued February 1933

$1.50

"The Depression Scrip That Redeemed Two Pacific County Towns"

s/6 of actual size .

Actual st e

�olume X�Number 4

60 Me 3ou'wZtefs .5aA Quarterly Publication of the Pacific County Historical Society . Inc .

A Non-profit Organization

Magazine subscription rate - $6.00 AnnuallyMembership in the Society - $3.00 single, $5 .00 couple

Payable annually - membership card issuedAddress: P .O. Box P, South Bend, WA 98586

Historical articles accepted for publication may be edited by the editors to conform to size and other requirements .Opinions expressed by the authors are not necessarily those of the historical society . All RightsReserved . Reprinting of any material approved by special permission from the Pacific County HistoricalSociety . Second class postage paid at South Bend, Washington .

Larry WeathersEDITOR

�irginia Graves - Subscriptions

Printed by Pacific Printing, Ilwaco, Washington

Our Coverby Larry Weathers

The photo offset reproductions on our cover were made using samples of the originalson display in the County museum . They are true reproductions only in proportion, lettering

and design . Duplication of color and texture is not possible on our cover . The reverse sides

of these samples will be found elsewhere in the following story . Those who wish to see the

"real thing" should visit the County museum at 1008 W . Robert Bush Drive in South

Bend (1 .5 p.m . Monday through Friday, 1-5 p .m. Saturday during the summer) .

Table of ContentsTITLE PAGE

Our Cover - Larry Weathers 62

The Great Depression and Pacific County - Larry Weathers 63

The 1930 Census for Pacific County - Larry Weathers, ed 65

The Stock Market Crashes and Sawmills Close in Pacific County, Part I- Larry Weathers, ed66

62

The Great Depressionand Pacific County

by Larry Weathers

This issue and the one that follows (Spring 1981) were difficult to prepare . Originally

the stories about Raymond's "Oyster Money" , South Bend's "Wooden Money" and Il-

waco's "Salmon Money" were to be the main focus of one issue. However, it was apparent

from the start that these stories could not be adequately told without discussing the Great

Depression . �ery likely these three local "currencies," or scrip as they are more ap-

propriately referred to, would not have been printed had it not been for the effect of this

economic and social crisis on Pacific County in the 1930's .

What follows is a selected chronology . It covers the first few years of the depression in

Pacific County's corner of the world and only refers to facts and events related to the print

ing of Raymond's , South Bend's and Ilwaco's depression scrip .

Acknowledgements must be made to several people for the selections which went into

this chronology : Mrs. Jean Hazeltine Shaudys graciously allowed me access to her family's

bound collection of the SO�TH BEND JO�RNAL, E .T. and F.A. Hazeltine, editor and

publisher ; Mrs. Ruth Dixon helped me collect pictures and contributed a story concerning

the collapse of Raymond's bank - Ruth is always there when you need the facts ; Mr. Gary

Holte, grandson of South Bend's favorite jeweler Halvor Holte, allowed me to use quotes

from a paper he wrote about South Bend's scrip ; Mrs. Catherine Payne, librarian at the

South Bend branch of Timberland Library, allowed me special access to the South Bend

WILLAPA HARBOR PILOT, Edwin M . Connor, editor and publisher; Mrs. Kitty Schultz,

librarian at the Raymond branch of Timberland Library, allowed me access to copies of the

RAYMOND HERALD, Harry N . Beall and C .S. Beall, editor and publisher; and my father,

Mr. Jim Weathers, allowed me to use his collection of South Bend and Tenino depression

scrip .

Obviously the twenty pages in this issue, and the twenty in the next, do not offer much

room for a comprehensive history of the depression in Pacific County . The selection for this

chronology is limited but I believe you will enjoy it .

m&W

63

Raymond, c. 1925In Halcyon days Raymond's many mills puffed a blanket of smoke over the town . The Quinault Mill inthe center of the picture burned down in 1929 .

-from Pacific County Historical Society Collection

The 1930 Census for Pacific County(extracted from the RAYMOND HERALD, May 9, 1930)

Editor's Note : On the eve of the Great Depression the Federal government announcedthat it had completed the 1930 census . The population of the �nited States had jumpedfrom 105,711,000 in 1920, to 122,775,000 in 1930 . By contrast, the population ofPacific County had only grown from 14, 891 in 1920, to 15,021 in 1930 . Obviouslygrowth was occurring somewhere else in the �nited States .

The reader should be aware of certain details concerning the tabulation below . First,the census for 1930 made use of voting precinct boundaries and not "city limits ." Therewere only four incorporated towns or cities in Pacific County in 1930 with "city limits ."Those with boundaries were : South Bend ( incorp. i n 1890), Ilwaco (1890), Raymond(1907) and Long Beach (1922) . All of the others were unincorporated "places" with nocity limits .

Secondly, the size of each precinct varied and was determined by the County Commis-sioners and Auditor . Raymond and South Bend had three precincts each within their citylimits . Rural precincts like Davis, Firdale, Pluvius and Nasel (Naselle) contained more ter-ritory .

Thirdly, the rural precincts were often named for the locale where votes were collectedat election times . The rural precinct of Davis will serve as a good illustration of this point .

The population of Davis, a logging camp on the Chicago-Milwaukee-St. Paul andPacific Railroad (or Milwaukee Road), was not 149 in 1930 . Davis was one of several log-ging camps in the precinct (the others were Bush, Burt, Elk Creek and Swem) which had acombined population of 149, men, women and children . Do not make the mistake ofthinking that the "town" of Davis had a population of 149 . The same is true for the popula-tions of Frances, Nemah, Knappton, North River (Brooklyn), etc .

Finally, the census for Pacific County is now conducted by "enumeration districts"created by the Census Bureau . They vary in size but do not correspond to the boundaries ofthe voting precincts . Today, the number of districts is considerably less than the number ofprecincts .

The following tabulation was extracted from a story on the front page of the May 9,1930 issue of the RAYMOND HERALD . The paper was edited by Harry N . Beall andpublished by C .S . Beall .

65

Pacific County

Precinct 1930 1920 No Precinct 1930 1920 "oFarms Farms

Bay Center 233 374 10 Willapa Bay Military Reservation 40 0 0Chetlo Harbor 38 90 0 North River 759 79 17Chinook 553 515 19 Oysterville 81 82 7Fort Columbia 6 53 0 Pluvius 297 400 1Davis 149 197 0 Raymond Ward 1 1170 1207 1Eklund Park 267 328 0 Raymond Ward 2 1671 1913 0Firdale 41 315 3 Raymond Ward 3 956 1140 2Frances 295 398 27 Raymond Outside 474 187 30Holcomb 125 65 26 Salmon Creek 254 307 13Ilwaco Town 751 787 0 Seaview 435 0 32Ilwaco Outside 131 223 13 Smith Creek 55 59 16Fort Canby 44 71 0 South Bend Precinct 1 608 0 0Knappton 231 200 0 South Bend Precinct 2 705 1948 1Lebam 409 794 30 South Bend Precinct 3 479 0 0Long Beach Town 394 0 3 South Bend 1 Outside 63 0 7Long Beach Outside 267 0 43 South Bend 2 Outside 210 0 12Menlo 366 330 41 South Bend 3 Outside 116 0 2Nahcotta 378 276 13 Sylvan (Sylvandale) 511 0 41Nasel (Naselle) 479 494 59 Willapa 422 743 46Nemah 139 162 8 Shoalwater Indian Reservation 33 16 0North Cove 386 183 30

TOTALS 15,021 14,891 553

The Stock Market Crashes andSawmills Close in Pacific County

PART I

by Larry WeathersThe Wall Street crash of October 1929 marked the beginning of the long slide into the

deepest economic depression in our nation's history. Its scope was world wide and per-sisted virtually to the outbreak in 1939 of World War II in Europe .

There is no consensus among economists as to why economic collapse occurredwhen it did, but overspeculation in the stock market, a farm depression that continued fromthe 1920's, loss of foreign markets and lack of purchasing power by the masses of the peo-ple were some of the factors which contributed to it . The prolonged depression whichfollowed the crash was characterized by business bankruptcies, bank closings, factory shut-downs, farm foreclosures, low prices, hunger and huge numbers of unemployed workers .Even local governments teetered on bankruptcy when it was apparent that unemployedworkers could not pay their taxes .

The depression certainly affected the people of the Willapa Bay region . However, theeffect on individual families varied greatly . Many were miserable, but few starved or losttheir homes . Generosity, trust and a good sense of humor got many County residentsthrough the worst years . After 1933, the inspirational programs of the New Deal alleviatedmuch of the want as well . Several public benefit projects were sponsored in the County -specifically, school buildings in the Willapa �alley, the Raymond Post Office and a hospitalin Ilwaco. The Civilian Conservation Corps was also responsible for putting people to workcleaning up the forests, planting trees and controlling fires .

According to some Pacific County pioneers (Sou'wester, Spring 1980, p . 14-15) thedepression of 1893-96 had a much more severe effect on residents here . During thatdepression there was nothing but private charity between the unemployed and starvation .The government had no social programs to inspire the destitute in the 19th Century .

The economic landscape of Pacific County sustained the true impact of the GreatDepression of 1930 . Sawmills closed never to re-open, businesses were liquidated, Col-umbia River canneries closed, logging camps shut down, banks closed when withdrawalsexceeded deposits and during the hardest years 1932-33 the circulation of � .S. currencywas a privilege enjoyed only by the rich . Everyone else used a system of bartering . Theeconomic landscape was not healthy .

In 1920-21 there were over twenty-six sawmills, shingle companies and door factoriesand veneer plants operating full tilt in Pacific County . Raymond had thirteen companies ;South Bend had seven; and Ilwaco, Knappton, Sutico, Willapa, Lebam, Globe and Walvilleeach had one .

In 1930 there were only eleven surviving mills . Raymond had the Willapa HarborLumber Mill (now Weyerhaeuser Co.), the Raymond Lumber Company (nowWeyerhaeuser Co .), Pacific Fruit Package Company (now Mayr Brothers Co .) and CaseShingle and Lumber Company (near Case's Pond), and Sun Lumber Company (onBaleville Road across from Willapa Harbor Port Dock) . The others had closed, burned, orconsolidated with Willapa Harbor Lumber Company by 1930 .

South Bend had three companies remaining in 1930 . They were the Lewis Mills and

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Timber Company (formerly known as the South Bend Mills and Timber Company and nowthe site of a public boat launch), J .A. Lewis Shingle Company (now the site of Harbor Rockand Tire Company) and Getchell Mills Company (a shingle mill near the present site of EastPoint Seafood Company). The other mills had closed or consolidated by 1930 .

The remaining County mills were located in Knappton, Ilwaco and Lebam .The reality of the Great Depression took several years to hit in the Willapa Bay region .

However, in early 1930 the signs of things to come could be seen in the headlines of thelocal newspapers . The re-opening of closed sawmills were continually rumored but neverbecame reality, the Oyster industry showed signs of reviving to take the place of the loggingindustry and the weather was not cooperating one bit .

Ed. . .SaysLocally, on this harbor, common laborers in

the sawmills, returned to work on January 5, andfound notices posted reducing their daily wage40 cents. It was the second wage reductionwithin a month or more. They now draw $3, or$18 a week. Other higher paid employees suf-fered less reductions . But these men in the millsare philosophical . They realize the hardships theowners of these mills have gone through and aregoing through in the industry, with only about 45percent of capacity cut in the states ofWashington and Oregon and in British Columbiathe past year. . .These men in the mills canweather the industrial and financial depression ifthe mills can keep operating full time, but it willbe a real hardship if these mills have to curtailand shutdown a week or more, or have to go to a4-day week .extracted from an editorial by Edwin M. Connor,WILLAPA HARBOR PILOT, January 8, 1930

New Mill OpensSun Lumber Co . Plant Starts

In Full ProductionMinor Alterations Follow Week

Of Trial Runs -Cutting Confined To Small Logs

45 Men At WorkWith Woods Crew Total Employed By NewIndustry Reaches 80-Other Mills To Open

The new Sun Lumber Company's small-logmill, located just outside Raymond city limits,now is operating at nearly normal capacity,following a week of trial runs and slight altera-tions incident to the opening of the new plant.

The mill employs about 45 men, and withthe woods crew furnishes work for about 80 . TheOwens Logging Company, which supplies logsfor the plant, was forced to cease operationswhich had been started near Willapacific, pend-ing the opening of the mill, but will now be ableto resume. . . .

The Raymond Lumber Company's nightshift, discontinued at the Christmas holidays, willresume operations March 1, it is expected, ac-

6 7

cording to announcement this week . In themeantime, the day shift is working on a 6 dayweek basis.

The Hart-wood mill, also closed for theholidays, may be expected to start operationsagain about February 1, it is understood .extracted from RAYMOND HERALD, Jan . 10, 1930

Oysterman Finds JapaneseSpawn

Ira Murakami, Japanese oyster farmer atLong Beach, has reported finding on shells ofoysters he is now taking, what he has recognizedas Japanese spawn .

The finding, if it is proved out in later tests, isone that Willapa Harbor oyster farm operatorsare hailing with interest, for it will mean that theJapanese seed which has been planted here bythe thousands of boxes recently, will not onlygrow, but propagate, and that in the future it willnot be necessary continually to re-seed the beds .

The spawn is tentatively traced back to 12boxes of Japanese seed planted three years agoexperimentally by the Long Beach Oyster Com-pany.

Murakami is now shipping 18 gallons ofshelled oysters daily, and has reported a growingdemand and an active interest in the market. Heis shipping the Japanese variety, of which therehave been so many plantings here recently .

extracted from RAYMOND HERALD, Jan . 10, 1930

Ice, Snow Mark Protracted ColdSnap In District

Mercury Stays Below Freezing Point ForTwo Entire Days, Tuesday And Wednesday

Trouble CausedFreezing Closes Factories

Water Crews Battle Closed Pipe LinesPower Fails One Night

One of the most severe and protracted coldspells that has struck Willapa Harbor in severalyears is now closing the second week of its reignwith day long freezing temperatures noted .

The cold snap began Saturday, January 4,but until a week ago had not assumed serious

Icebound Willapa Bay at Nahcotta, January 19, 1930-a Fitzpatrick Photo from Clarence Dolan Collection,

Pacific County Historical Society

proportions.A light fall of snow on frozen ground, with

slight thaws during the day soon brought icystreets . During the last week, however, cold in-creased until ice skaters found pleasure at the bigCase pond on Hinkle Street until snows Tuesdayand Wednesday partially covered the skatingarea .

City water department crews have beenpushed strongly to keep water flowing through allthe city lines to customers, . . .

Frozen sawdust about pulleys caused abroken belt that shutdown the Willapa mill Mon-day, and frozen pipes at the Pacific Fruit PackageCompany's plant halted operations there thesame day .

Ice on Willapa Bay 1930-from Pacific County Historical Society Collection

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z

Saturday night and Monday night were ratedas the coldest by C .E . Thew, weather observer.The official thermometer dropped to 11 on thosetwo occasions (at Eklund Park). . . .

Reports from Naselle were that the ther-mometer there dropped to 5 above zero Sundaymorning, while at Menlo temperatures of 6 and 8were reported. One report of temperature downto 4 came in from Raymond Tuesday andWednesday according to the official report . . .

extracted from RAYMOND HERALD, Jan . 17, 1930

Old Man Winter Is StillIn Control

Cold Record Is SetWith the mercury below the freezing point

continuously for several days in succession, andnew low records for temperature set, the coldsnap on Willapa Harbor entered the third week ofit's reign last week end . . .

The cold forced the closing of the Sun mill,while at the Raymond mill it was necessary to usedynamite to separate the logs in order to con-tinue cuffing. . . .

extracted from RAYMOND HERALD, Jan . 24, 1930

Mill Shut DownNaselle, January 22-The continued cold

weather here caused the closing of the Knapptonmill last week. It has not yet resumed operations .

New records have been set in temperature,the mercury dropping to four degrees below zero

Mills Resume Cutting But GoTo Six Hour Day

�ntil Merger Is EffectedLewis Mills and Timber Co. and Raymond

Lumber Co. resumed operations last Mondaymorning following a two weeks' shutdown . Thesemills are now working a 6-hour day. . . .

The belief is that on or about April 1 amerger will be consummated and Lewis Mills andTimber Co ., Raymond Lumber Co . and WillapaLumber Co . will join the big Weyerhaeuser

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at the hatchery here Monday morning. The river(Naselle) is frozen from the landing to the tollbridge and ice skating there is a popular sport . . .

extracted from RAYMOND HERALD, Jan. 24, 1930

Oyster Planting Being ContinuedTwo Companies Make Plans For SeedingOf Further Lands On Willapa Harbor

Prospects for the development of the oysterindustry on Willapa Harbor were further en-hanced by the statements of two visitors thisweek, representing different companies nowoperating in this territory .

The first, J .O. Reitan of Seattle, manager ofthe Willapa Bay Oyster company, was here tomake arrangements for the shipping in andplanting of 1200 cases of Japanese seedFebruary 27 .

The shipment is leaving Japan on a slowboat . . . . Included in the shipment are 900 casesof seed for the company, 100 cases for CharlesAxford, 100 cases for Fred Wiegardt, 40 casesfor Tom Olson of Bay Center, and 40 cases forCharles DeRoos. The Willapa Bay companyplantings will be on the former Katzer grounds .The other cases will be planted in the smallerholdings of the local oystermen . . . .

The second visitor was Henry Abernathypresident of the Aberdeen Oyster company . . . .He announced that 2500 cases of Japanese seedhad been ordered by that company for plantingin recently acquired oyster lands on Willapa Har-bor . . . .

extracted from RAYMOND HERALD, Feb. 14, 1930

Throughout the rest of 1930 the newspapers continued to report that County millswere closing for temporary repairs and refurbishing . Most of the owners were never able tofind the capital to re-open . Those that did cut their payrolls .

In 1931 timber industry promoters told the newspapers that things were going to getbetter . However, by mid-year it was apparent that the downward slide was growing worse .

organization. The latter has the biggest and bestselling organization in the �nited States . . . . Itscontrol and sale of the output will stabilize themanufacturing and selling end and will assurecontinuous running for the next 18 to 20 years . .. . There is a feeling locally and on this harborthat there may be a shutdown during March . . . .�sually these big corporations do not give outany information until a thing has been consum-mated and ready to go .

extracted from WILLAPA HARBOR PILOT,Feb . 19, 1931

ReorganizationOf Harbor Lumber And Logging

Industry �nder TheManagement And Control Of TheWeyerhaeuser Co ., Is WelcomedRaymond Lumber Co., Willapa HarborLumber Co., Lewis Mills and Timber Co .,Sunset Logging Co ., Join Hands In Giant Cor-poration With Weyerhaeuser Timber Co . AndWestern Brokerage And Land Co ., Raymond

Plants Started Operations YesterdayCompletion and announcement by the

Weyerhaeuser Timber Co . spokesman of thereorganization of lumber plants and loggingoperations on Willapa Harbor was made lastweek after the Pilot was in the mails. Thespokesman was J .W. Lewis, the new managinghead of the merger . . . . The participating com-panies held meetings of their officers andtrustees and ratified the transfer of their proper-ties into a corporation that will be known as theWillapa Harbor Lumber Mills . . . .

The logging operations will be in the chargeof Lloyd Crosby . The operating program for the

South Bend, c . 1927Lewis Mills and Timber Co . in lower lefthand corner

-a Brubaker Photo from Dora Backman Ellis Collection,Pacific County Historical Society

new company contemplates the operation of theRaymond mills on a limited production . Thesetwo mills, Raymond Lumber Co . and WillapaLumber Co ., resumed operations yesterdaymorning. The general office of the company willhave its headquarters in the former offices of theRaymond Lumber Co ., and all operations will bedirected from this headquarters. . . .

No announcement has been made as towhen the Lewis Mills and Timber Co . mill atSouth Bend will resume operations . The hope isexpressed that it will not be delayed muchlonger, as it has been down now for about threemonths. The local office records have been takento Raymond . In all probability a small office forcewill be employed here when the mill starts opera-tions again . . . .

The reorganization of the local mills in amerger with Weyerhaeuser Timber Co . interestsis generally regarded as one of the best thingsthat could have happened to the lumbering andlogging industry in this county . WeyerhaeuserTimber Co . is a keen, businesslike, optimisticorganization with ample capital and resourcesand financial connections. It has a wonderfulsales organization, and its entree here in com-

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plete control of the output of three good millsand big logging operations will stabilize the in-dustry and their market, and will eventually inureto the benefit of the workers. The company hasalways had a reputation of being human in itsrelations with its employees, takes a kindly in-terest in their welfare, and has been a potent fac-tor in the manufacture of lumber and forest prod-ucts for a half century from operations in thegreat but now diminished forests of the MiddleWest to the extensive operations now in PacificCoast states. It is always optimistic and never apessimistic organization, is a quiet and conser-vative organization, and one never given to spec-tacular methods or frequent appearances in thepublic prints. It is an organization that movesquietly, sometimes so far as the public seems tothink devious ways, but always an asset to the

Ed . . .Says. . .Locally things are stagnant (in South

Bend) . There is small probability of the old LewisMills and Timber Co . mill showing any signs oflife until early Fall, if then . There is the probabili-ty of a four-day week in the Raymond mills . Thelocal mill (in South Bend) has been idle since lastFebruary . Families are hard up . No word comesfrom the merger of an encouraging nature . Cur-tailment has been the order thus far . There is nolife in the shingle industry . Both mills here aredown and have been for some weeks, and maybe for some weeks longer .

extracted from an editorial by Edwin M . Connor,WILLAPA HARBOR PILOT, June 4, 1931

7 1

communities in which it operates . . . .It owns large acreage just across the river

from the South Bend city hall (now known asBaleville) . It would make a wonderful site for itsbig mill that South Benders have so longdreamed about and hoped would come. Therewill be ample room for a pulp mill and a papermill . . . .

This newspaper welcomes this new capital,this new driving force, this new organization toWillapa Harbor. For years it has been theheaviest taxpayer. Let us express the hope it willso profit that it will be able to double its contribu-tions to the county treasury in the years that arebefore it.

extracted from WILLAPA HARBOR PILOT,May 21, 1931

Lewis Mills and Timber Co . site 1979South Bend's oldest mill had many names during its long life (1869-1931) . �ery little remains but for

these rotting pilings at low tide .-a Weathers Photo, Office of Archaeology and

Historic Preservation Collection

Ed. . .SaysSome agency in South Bend should begin

thinking of the relief that will have to be given tosome South Bend families during the ap-proaching winter. The largest payroll the townhad quit functioning last February . The old LewisMills and Timber Co. hasn't turned a wheel inclose to five months and there seems littlelikelihood that it will resume this year . . . . Peoplehave not been able to pay their taxes and willcontinue to be unable to pay them until thisdepression lifts and they get back to work . . . .

Raymond may also find many in like condi-tion this winter, despite the fact the town has twoof its lumber mills operating . . .

extracted from an editorial by Edwin M . Connor,WILLAPA HARBOR PILOT, June 18, 1931

Ed. . .SaysIn all fairness to the businessmen, the

former employees and the citizens of South Bendwe believe the Weyerhaeuser Timber Co . shouldmake some announcement as to the probablefuture activity of the Lewis Mills and Timber Co .mill in South Bend. While South Bend in nowisebegrudges Raymond its payroll from the twomills operating there under the recent merger,South Bend needs this substantial payroll asset .With both of our shingle mills down, and prac-tically no lumber mill or shingle mill payroll sincelast February, every week piles upon precedingweeks the bad situation in which South Bendfinds itself . This is written in all kindness and withthe hope that some official announcement maybe forthcoming. Everyone on this harborwelcomed the merger, believing that it was thesalvation of the lumber manufacturing industry

on this harbor .Soon the road contracts that have kept some

local men employed will have been finished . Thiswill mean more unemployment, locally . . . .

If this mill (Lewis Mills and Timber Com-pany) is to be abandoned or if it must be recondi-tioned and will then begin to operate, the peoplewould like to know. Business is dull in SouthBend . . . .

We fully appreciate that our local conditionis probably better than In many other com-munities, but it isn't a very rosy outlook if there isto be no payroll locally this winter. . . .

Families must eat and keep warm and beclothed before they can think of paying taxes andthey are not paying them . There has been a dropof 50 per cent in taxes coming into the city. . . .

extracted from WILLAPA HARBOR PILOT,May 21, 1931

Ilwaco Bank, 1969Southwestern Washington Bank was the first name of this bank . National Bank of Commerce

1946.1975. Rainier National Bank replaced this building with a new bank .-from Pacific County Historical Society Collection

In 1920-21 there were five banking institutions in Pacific County . Ilwaco had theSouthwestern Washington Bank (later the First National Bank of Ilwaco was formed, whichbecame the National Bank of Commerce, and is now Rainier National .) South Bend hadthe Pacific State Bank at 900 Water Street (now Seattle First National Bank) and FirstGuaranty Bank of South Bend in the Werley Building at 710 Water Street (now the Depart-ment of Social and Health Services) . Raymond had the First National Bank on the corner ofFirst and Duryea (the building was torn down in 1972) and the Willapa Harbor State Bankon the corner of Third and Duryea (the building burned down in 1971) .

By 1930 the First Guaranty Bank had closed its doors and the others were struggling .In September 1931 the two banks in Raymond decided to consolidate to better serve theircustomers .

72

Willapa Harbor State Bank, c . 1910The �anetta Building was built in 1908 in Raymond. �pstairs tenants were Dr .'s O . Nevitt and Eads,Realtors Shahour and Stupp, and Attorney W . Buttner. In 1920 this became the location of The First

National Bank of Raymond .-a Liddell Photo from Ruth Dixon Collection,

Pacific County Historical Society

Third and Duryea Streets, Raymond, c. 1925Willapa Harbor State Bank moved into the building on the right in 1919 . Morales Shoe Store and TheElk's Lodge were next door . On April 26, 1972 the bank burned down and was later replaced by a new

Elk's Lodge.-from Ruth Dixon Collection,

Pacific County Historical Society

73

Raymond Banking InstitutionsConsolidated

Raymond's two banking institutions, WillapaHarbor State Bank and First National Bank ofRaymond, completed their consolidation ar-rangements last Saturday. This consolidationwas briefly forecasted in The Pilot some weeksago. The new consolidated banking institutionwill be known as First Willapa Harbor NationalBank . . . .

Before these negotiations could be com-pleted, the Willapa Harbor State Bank was ex-amined by representatives of the Comptroller of

74

the Currency, and the First National Bank was ex-amined by representatives of the State BankingDepartment of the State of Washington . Thecompletion of these examinations, made possi-ble the approval of the consolidation by bothFederal and State banking authorities . . . .

Operation of the new bank will be conductedin the present quarters of the Willapa HarborState Bank . . . . Total resources of the new institu-tions will be close to one million and one-halfdollars . . . .

extracted from WILLAPA HARBOR PILOT,Sept. 3, 1931

The following story was written in 1968 by Pacific County's premier historian RuthDixon. It traces the story behind the failure of Raymond's banking business in early 1932and provides us with reasons for the eventual printing of Raymond's "Oyster Money ."

The Day the Bank Failed(written by Ruth Dixon, 1968)

Our story begins with the opening of the Willapa Harbor State Bank on August 20, 1908 . It waslocated on the corner of First and Duryea streets in Raymond . C .S . Gilchrist was president ; H.W. Mac-Phail, cashier ; R .L. McCormick, vice president; and C .W. Reed, assistant cashier . The Directors of thebank were Gilchrist, MacPhail, McCormick, M .W. Daubney and L.�. Raymond .

In 1914 there was a change in the bank's setup. H.W. MacPhail became president; E .E . Colkett,who came to work in 1911, became cashier ; C.E. Meredith, who came in 1910, and Miss MildredSandell, who came in 1913, were assistant cashiers .

In 1920 the bank was located in a new building on the corner of Third and Duryea (the presentsite of the Elk's lodge building) streets . H.W. MacPhail was president ; Ralph H . Burnside, 1st vicepresident; E .E . Case, 2nd vice president; E .E. Colkett, cashier ; and C.E. Meredith, assistant cashier.The Directors were C.L . Lewis, Case, Burnside, F .A. Hart, H .J. Ellis, Colkett and MacPhaIl .

On September 1, 1931, the Willapa Harbor State Bank, and another Raymond bank, the First Na-tional Bank, merged both staff and resources at the Third and Duryea Street location .

The First National Bank had originally been organized in 1919 by J .G. Heim, B .C. Kremmel andJohn Andall of South Bend, and L.�. Raymond, Fred B . Norman, and Attorney John I . O'Phelan, ofRaymond .

In May of 1920, the bank opened in the �anetta Building, corner of First and Duryea streets, theformer quarters of Willapa Harbor State Bank. The first officers were J.G. Heim, president, who wasalso president of the Pacific State Bank of South Bend ; Frank Nixon, vice-president ; Fred Eichner,cashier ; and C .L . Switzer, assistant cashier . The Directors were Heim, Nixon, Raymond, and J .W. Max-well (who was also president of the National City Bank of Seattle) . Within a few months of openingFrank Nixon became the president.

The First National Bank had the distinction of having $25,000 worth of currency issued to it withthe name of the bank on it. This was the first, and probably only time a Pacific County bank held cur-rency bearing its own name. Perhaps some samples of the bills are preserved in private collections .

When the two Raymond banks merged the Raymond Herald printed the joint statement of thepresidents . It said, "The merging of the two banking houses is deemed wise in the interests ofeconomy in operation and better ability to serve the public from every banking standpoint, and will inno way work to the disadvantage of the patrons ." Between the lines it was evident that the deepeningdepression had dictated the merger .

Officers of the new bank were H.W. MacPhail, president ; E.E . Colkett, vice-president and cashier ;Fred Eichner, vice-president and trust officer ; C .L . Switzer, C .E . Meredith and Mildred Sandell, assis-tant cashiers . The Directors were Frank Nixon, Chairman of the Board ; MacPhail, C .L. Lewis, H .J .Ellis, Carl Gylling, Claude House, L.�. Raymond, EIchner and Switzer.

The perilous financial times ultimately doomed the bank merger to failure . What had lookedgood on paper (the bank had been capitalized for $120,000), and seemed so sensible and logical Inthe directors' rooms, did not look so good to the public in the Fall of 1931 .

There are dozens of explanations, but whatever the reasons, there began a "silent run" on the ac-counts of the new bank. At the end of the year the bank had honored withdrawals totaling $400,000 .No depositor was told he could not withdraw money from his account . The Directors chose not to in-voke the bank's optional 90-day withdrawal policy, because they hoped to inspire confidence . Whenall of the currency on hand at the bank was given out, more was obtained from outside sources . It wasbecoming evident to the bank that a considerable amount of cash was going "underground" in cansand fruit jars . When Raymond's postal savings increased to raise the office to sixth place in the statethe picture was clear .

On February 2, 1932, customers of the bank were surprised to find a notice attached to the door :"This Bank has been �oluntarily Closed for Liquidation or Reorganization ." The Directors, who hadmet the evening before, had voted to take this action even though the bank was still solvent . They feltthat to keep the doors open would be to the detriment of their loyal depositors . It was said that thebank still had assets of at least 140 per cent of deposits .

It is not hard to imagine the state of shock the merchants went into that morning . With few excep-tions the business people of Raymond had continued making deposits to their accounts and hadwithdrawn very little. The closing of the bank meant that the money they had in their cash register andpocket was all they had available for business transactions . The unexpected "freezing" caused themost serious financial crisis ever to face Pacific County citizens .

Hoping to save both the cost and time of Receivership, a group of about 400 depositors gatheredat the Elk's lodge (also located in the Bank building) on February 8, 1932, to promote a plan ofreorganization . The meeting was chaired by E .E . Case, owner of Case's Shingle Mill, and the minuteswere taken by Harry N . Beall, owner and editor of the Raymond Herald. The reorganization plan wassubmitted by John I . O'Phelan, attorney . A committee of seven was named and asked to report backon the plan at another meeting . The committee was composed of S .L . Dennis, Floyd Lewis, E .A . Cady,C.S . Beall, J .H . Fee, Willis Bunker, and E.C. Dorgan . In late February this committee submitted a planfor reorganization to the comptroller of currency in Washington, D.C ., for approval .

While the depositors waited for word from the Federal Government, the citizens of Raymond werebeginning to take their predicament In stride. Those with a sense of humor held "Depression Parties"where they planted backyard gardens or cleared vacant lots for spud patches. In the stores cashcustomers were rare ; eggs were traded for gasoline, gasoline for a haircut, a haircut for a couple ofpair of sox. Even those who were known to have money got into the habit of bartering and tightly heldonto their currency .

In the meantime, the Raymond Chamber of Commerce was not idle . Lack of a banking facilityand inability to draw on bank accounts for wages and daily transactions was seriously hurtingbusiness. The chamber decided to meet the crisis by creating a local currency to be redeemed when"real" money was available again . They borrowed the idea from the town of Tenino, Washington,which had printed "wooden money" in December 1931 .

On May 20, 1932, Howard Jensen, president of the chamber for the third successive year, an-nounced that the Chamber of Commerce planned to issue paper "Oyster Money" in denominationsof 25t, 50<, $1 and $5 . He said that $30,000 worth of the scrip would be printed and it could be usedin local trading with merchants. Depositors In the defunct First Willapa Harbor National Bank wereallowed to assign up to 10 percent of their bank deposit to the Raymond Chamber of Commerce in ex-change for a like amount of scrip . The C. of C. hoped to start a cash flow in Raymond with their "oystermoney ."

Raymond derived a great amount of publicity from the issuance of its oyster money scrip, but thefact remained that the closing of the home-owned bank was a great blow to the prestige of the town .

The First Willapa Harbor National Bank was quite solvent when it closed its doors onthat day in February 1932 . It was a simple matter of fear which had caused the Officers ofthe bank to lock their doors . They saw a "silent run" on deposits occurring and it was theonly way they knew of stopping the ultimate bankruptcy of the bank . Eventually the bankwas allowed to reorganize and open on a limited basis in the Fall . It operated until May1934 when it became the Raymond branch of the Seattle First National Bank ; Joel F .Gould, manager .

Following the closure of Raymond's bank the circulation of � .S. currency in the areadried to a trickle . Residents turned to the age old bartering system . Goods were traded forservices and vice versa . In order to meet its payroll, the County started paying teachers and

75

Water Street, South Bend, c . 1925Pacific State Bank is located in the center of the photo behind three telephone poles . Regalia Cigar

Factory is next door .-from Martha Fykerud Collection,

Pacific County Historical Society

other employees with interest bearing warrants . �nfortunately, even a 6 percent interestbearing warrant was a "pay check" which couldn't be cashed until the County had tax

money with which to redeem them .

The Warrant QuestionWord from the state attorney general this

week finally lays at rest all the vague and un-founded rumors that persisted in Raymondrecently as to the legality of Raymond school war-rants .

True, the district is heavily in debt, but theattorney general has ruled that so long as thebudget for current operation is made up withinthe expected tax income and warrants do not ex-ceed that budget, those warrants are legal . . . .

That banks aren't taking them is no causefor thinking them dangerous . Raymond school

76

warrants may run 14 to 18 months before theyare redeemed . In present days, banks can't han-dle that type of loan . . . . But the individual whohas money to spare should find that type of in-vestment most attractive, for it means steady col-lection of 6 percent interest over a fairly longperiod of time. . .

. . .warrant purchase is a superior type of in-vestment. . .their purchase by those who can af-ford them would go far toward relieving the pre-sent depression in this city and county .

extracted from an editorial by Harry N . Beall,RAYMOND HERALD, March 4, 1932

Although the Pacific State Bank in South Bend was never faced with a "silent run" ondeposits the town had the same currency circulation problems. All three mills in town were

closed and the unemployed workers were unable to pay their taxes . The biggest payroll intown was at the Courthouse and they were being paid with warrants .

Warrants were of no value for outside payment of insurance premiums, or state andfederal taxes, but in South Bend, Raymond and Ilwaco they were often redeemed for cash

from those who had it. An individual who was paid in warrants, and who could not wait for

them to be redeemed would ask those with cash to exchange with them. �sually the war-rant was traded for less than face value . The new owner, who could afford to wait for themto be redeemed, would collect full face value plus interest .

The Ingenuity Of A Small Town. . .One specific example of an exchange was told to me by Henry Giles, a retired South Bend

school teacher . He says, "There was one man, about ninety-two years old, who would come by theschool every pay day and change the warrant of one of the teachers . Before this fellow came, we woulddecide who needed the money most that month and have him change the warrant. I remember onceasking him why he was doing this for us. He replied that he wanted to have some sort of security forwhen he got old. He said it in such a straightforward way, I found it hard to believe that he really was asold as he was ."

extracted from a high school paper written by Gary Holte, 1969

"Buy Warrants" Committee SaysAnti-Hoarding Campaign Started In City

With Effort To Get Cash InvestedJ .J . Langenbach, one of the city's committee

named by the Chamber of Commerce to aidPresident Hoover's anti-hoarding campaign, wasthe principal speaker at the regular meeting ofthe Raymond Kiwanis club . . .Wednesday .

Mr . Langenbach sketched the nationalscope of the Hoover plan . . after which he turnedthe discussion to Forrest E. Beck, school

77

superintendent. . .Mr. Beck suggested that primary local relief

could be secured through investment of hoardedfun ' hereabouts in school warrants, pointingout that the attorney general had ruled all Ray-mond warrants perfectly legal and suggestingthat they draw six percent interest against a 2 per-cent for postal savings, and . . .for those fundsknown to be buried and hidden in some cases inthis city .

extracted from RAYMOND HERALD, Mar. 18, 1932

Exchanging money for warrants was a fine idea for those who had one or the other, butmany residents were excluded from the process . Residents in Raymond had their money ina closed bank and bartering was their only option . On May 19, 1932 Edwin M . Connornoted in an editorial that, " . . .It (Weyerhaeuser) must be hard up, too, with only one of itsmills running and that from 2 to 4 days a week and with a basic scale for common labor of$2.60 . . .There hasn't been a continuous payroll in South Bend in 15 months except asmall oyster payroll . . . ."

Some other form of currency was needed .

Is This A Racket?Just to prove that there may be profit in any

adversity, the little city of Tenino. - .is going tomake some money out of the closing of its bank .

Faced with the same shortage of cash thathits every town with the closing of a bank, theTenino Chamber of Commerce took agreementsfrom merchants to use assignments of 25 per-cent of their claims as security for the issuance ofwooden money, to be used as a temporarymedium of exchange .

The Tenino printing office printed "bills" onsmall pieces of veneer in denominations of$1 .00, $5 .00 and $10.00 and issued $513 in thefirst printing.

The wooden money was such a novelty that

Tenino business men soon found themselveshandling cash Instead, for tourists going throughpromptly picked it up for cash as souvenirs . Nowthere is no more available, and requests are com-ing in from all parts of the country for the wooden"bills" . So with the need of the temporary moneyalmost past, the Chamber of Commerce now hasauthorized the issuance of $500 more of theveneer "bills", not for use as exchange so muchas to sell to souvenir hunters . Since, in those con-ditions, the certificates won't be cashed in, thedeal is that much clear profit to the city .

There's no moral to this story, unlessperhaps it is that finally there has beendiscovered a way to sell lumber at a profit .

extracted from an editorial by Harry N . Beall,RAYMOND HERALD, March 4, 1932

Scrip Issuance Plan Of ChamberRaymond Chamber of Commerce at their

Tuesday meeting discussed the possibility of is-suing scrip, secured by deposits in the First

Willapa Harbor National Bank .

extracted from RAYMOND HERALD, May 6, 1932

$30,000 In Scrip Plan To RelieveBank Depositors

Ten Percent Issue On Deposits To Be SecuredBy Proof Of Claim-Four Denominations

Plans CompleteNew "Money" To Be Offered Within 10Days-Redeemable After Payment Of

Bank Dividend"Raymond's Oyster Money" a new scrip to

the amount of $30,000 will be issued in Ray-mond next week as the result of a Chamber ofCommerce plan, reinforced by popular demand .

The purpose of the issue is to place amedium of exchange in circulation in the city,the value of which is secured by deposits in theformer First Willapa Harbor National Bank, andso give depositors an opportunity to use a por-tion of their deposits now frozen there in the pro-cess of liquidation and receivership.

M.C. Welsh, William Busch and D .C. Aker-man . . .investigated the possibility of the issueand arranged for it .

"We found," they reported, that many . ..depositors had real need for a part of their sav-ings at once for the purchase of the necessities oflife . . ."

As a result they recommended to theChamber trustees that an issue of $30,000 inscrip be authorized, and after conference withJohn H . Cole, receiver of the bank, the plan wasadopted .

The details of the operation of the plan areas follows: Any depositor in the bank who wishesto secure some of the scrip, must first secure his

78

proof of claim from the bank receiver. That proofof claim must then be taken to Mrs . GladysLa�igne, secretary of the Chamber, and assignedto the Chamber of Commerce . In return Mrs .La�igne will issue a receipt for the proof of claim,the receipt stating that the claim will be returnedto the original holder after the payment of a divi-dend of 10 percent or more by the bank.

. . .On tender of the proof of claim asdescribed, the depositor will be given authoriza-tion to receive 10 percent of the amount of hisdeposit in the scrip . Miss Mary J. Huffman will actas cashier in distributing the scrip . . .The scrip isto be redeemed in cash within 10 days after thepayment of a dividend . . .by the bank receiver .

The scrip will be issued in denomination of25 cents, 50 cents, one dollar and five dollars . . .

The "Oyster Money" will be . . . printed indark green, will carry its denominations in largefigures, will carry the facsimile signature of theChamber of Commerce officers, and will benumbered serially . Specially engraved plates arebeing secured for the printing, and both sideswill carry the reproduction of an oyster shell tocarry out the "Oyster Money" motif .

extracted from RAYMOND HERALD, May 20, 1932

Raymond Chamber Issues $30,000Oyster Money Anticipating DividendAn echo of the days of the WAHOO or

hemlock money during the administration ofPresident Theodore Roosevelt was heard in Ray-mond this week, when the Raymond Chamber ofCommerce sponsored an issue of $30,000 ofoyster money scrip . . .Tenino issued about$4000 in wooden money recently . Souvenirhunters grabbed up a lot of it. This is expectedwith some of Raymond's oyster money . Theoyster money may also be used in local trading,where merchants will accept it .

extracted from WILLAPA HARBOR PILOT,June 2, 1932

The Raymond scrip was printed on white paper and issued on the morning of Tuesday,May 31, 1932 . Each of the bills were slightly smaller than the size of a present � .S . dollar .The designs and lettering on both sides were in dark green . The front had a drawing of anoyster with the corners reading either "two bits", "four bits", "1 buck" or "5 bucks" . Thereverse side explained the terms of the issue and carried the names of chamber presidentHoward Jensen, and secretary, Gladys La�igne . A serial number, in red ink, was stampedon each denomination . During the first two days of issue over $3,000 worth of the scripwas circulated . A new "currency" had been discovered .

Weyerhaeuser Brings Great JoyTo Gilded Palace

There was joy in the Gilded Palace of I

Reckless Extravagance (Edwin M . Connor'stongue in cheek nickname for the County Court-house) on Tuesday, when the WeyerhaeuserTimber Co. sent in its check for $94,000,representing half its real estate and timber taxesfor the year 1931 . On the afternoon train anothercheck for $41,000, representing half of its taxeson mill properties was also received . BeforeMarch 15, the company had paid another$14,000 as the first half of its personal propertytaxes. The Weyerhaeuser Co., which includes theholdings of Willapa Harbor Mills, a subsidiarycorporation (it became a branch in 1949), has, I

79

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m 'le e aroceeds ofdeeposilors cerlrjGcales ?sued /J Pr rrc<rr'r,-

thei r.si ii i 5 \ 11 PEOR tTI0, AL BANK OF RAYHND a?rd assicrnrc/ fo RAIMOND C AMBER

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of c ~i .L OCE • crud r<!ilhnt ten das al !er a dirride ;zd of Je;r nvr cenlz5pai,--thollavnronrl Chain /or oo," Comiiierc ecCrl Cp,rytoMe iralderlhereo

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u NOT Er PE OEEMro Z�?}I110�~( ltttll l'11fI~1.t�lTTifThE ;~Ty�C~,,

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MAY. 1032

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Raymond's "Oyster Money" issue of May 1932

% of actual size.

Front and reverse sides of a "two bits" piece-from Pacific County Historical Society Collection

The economic news in Pacific County was beginning to look a little rosier in otherrespects as well .

therefore paid in a total of $149,000 in real andpersonal property taxes, which represents one-half of its taxes for the year 1931 . By December1, the other half is expected, which will carry itstotal tax to $298,000. In former years theWeyerhaeuser Timber Company paid alone ap-proximately $300,000 in taxes, and the taxespaid by the various mill properties in South Bendand Raymond, then owned independently, werein addition to what is now included as the wholeof the Weyerhaeuser Timber Co. and WillapaHarbor Mills payments. But there has been ageneral lowering of valuations throughout thecounty by the county assessor . The payment oftaxes has been awaited by the county officials .Without such payment the county governmentwould have been badly crippled, and much of

the projected road work would have halted orbeen slowed down . Current expense and othercounty and school warrants can now be called for

< Jht.~ (-(razf cafe • zs ydeemahle-nrer',°cps ''dposit,

,rtifL :tes t~sucd1 'A RAS H04 P :IItINiL t?AAt I

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% of actual size .Reverse sideof Raymond'sOyster Money"1 buck"

Tenino's"Wooden Money"issue of July 1932

th3 sF,R1If Cx(t a RF .DEEMASt .e. fl' IHE fS�STIES uF 5-IcChamber of Commerce

Tenino, Wash.I ROM DI�IDENDS ASSIGNED TO IT FROM THE CITIZENS BANEFOR THE AM %-r Oi T�, ()

TWENTY-FI�E CENTSIN �NITED STATES C�RRANCT

80

payment.extracted from WILLAPA HARBOR PILOT,

June 2, 1932

'0/ of actual size .

Front and reversesides of the scripthat started it all

-from Jim WeathersCollection

The story of the depression scrip of Pacific County will be continued in the next issue of theSou'wester as editor Weathers presents Part II of "The Stock Market Crashes and Sawmills Close inPacific County."